Next year, the Chinese Communist party (CCP) will celebrate its 90th birthday. Founded with a mere 53 members in July 1921 in Shanghai, it has now burgeoned to 78 million. Since 1949, it has been the ruling party in the new country it created, the People’s Republic. In its nine decades of existence, two thirds of that in power, it has passed through the Japanese and then National assaults in the 1940s, self-inflicted economic implosion and mass starvation in the 1950s, and the internal purges of the cultural revolution from 1966, which almost decimated it. Today, as Richard McGregor rightly points out, it presides over one of the planet’s great economies, making its mark on regional and global issues such as security and climate change, with not even the weakest organised political opposition at home.

It has done this, McGregor shows, by controlling three crucial areas: information, the military (the People’s Liberation Army still reports to the party, not to the government), and a vast, countrywide network of party-related organisations and positions that shadow the government. In order to stay in power, the CCP has turned its back on a history in which it had a predisposition to violence when in a tight spot. Now it has made a grand pact with the private sector, allowing entrepreneurs to flourish and large swaths of society to carry on without political interference. As long as no one talks of setting up competing political parties, this arrangement has worked well.

The acceptance of a capitalist class is a mystery that McGregor spends much time explaining. No one really knows what proportion of Chinese GDP comes from the non-state sector, but it is significant. In 2001, the CCP leaders allowed businesspeople to join the party. Since then, as the economy has powered forward, they have become more embedded in the work that the CCP tries to do. Key parts of the business world, however, are still ruthlessly controlled. The heads of the top companies, largely in power or telecommunications sectors, are appointed by the party. The CCP’s pragmatism, inculcated in it by Deng Xiaoping, is a thing to marvel at. Officials can tolerate a world in which Marxism lives side by side with cut-throat capitalism, in which it is glorious to grow rich, as long as you don’t grow political, and in which a middle class has emerged free of most of the restive demands that have occurred in other societies moving from one-party rule to democracy. Democracy, from all the evidence in this book, is not only a long way off in modern China but would destroy a remarkable hybrid that is, at the moment at least, delivering.

Not that things are problem-free. Corruption has ravaged the CCP in recent years. Control of all key appointments of power in the country means that the party is alone in being its own regulator. McGregor describes the rampant greed of many modern officials, but makes clear that even the cleanest, when they take up positions of power, have to balance meagre official wages of a few hundred pounds a month against bungs from businesspeople and others going into the millions. Few, if any, are immune. He profiles a Mr Ma, who starts his career with a high-minded refusal to take any backhanders, but who then descends into a world where his life is awash with money. Ma was only unusual in getting caught. With three successful prosecutions for every 100 embarked on, corruption for cadres is a low-risk, high-return game.

This book is subtitled “the secret world of China’s communist leaders”, but there are plenty of areas where even the hardest digging doesn’t get far into the party’s shadowy hinterland. Things are about to get worse. At the next major party congress in 2012, seven of the nine slots on the standing committee, the apex of power in modern China, will need to be filled with new faces. With no clear rules for how this is done, and no precedents, the CCP will have to undertake what McGregor argues is its biggest challenge – governance of itself.

And one wonders whether the current period will be looked back as the party’s golden era. The easy work of building a modern economy (and that was hard enough) has now been partially achieved. In the coming decade, the CCP is going to have to deal with rising social expectations, massive demographic problems (an ageing population) and huge environmental and energy problems. Its current political system has changed surprisingly little from half a century ago, when it was created. While it looks strong and impregnable today, and on McGregor’s account is a formidable force holding Chinese society and statehood together, one cannot help sensing small signs of decay. The issue of the future is whether it will end in the same bloodshed and catastrophe in which it started, or whether the CCP will be able to come up with a unique structure that preserves its own interests, but allows Chinese society to modernise and develop.

This article was published in The Guardian and is written by Kerry Brown. Kerry Brown is co-author, with Will Hutton, of Friends and Enemies: The Past, Present and Future of the Communist Party of China (Anthem).